In many industries, decisions about projects for the manufacture and sale of a good require manufacturers to estimate technical risk, or technical maturity, associated with the state of development of the project in order to correctly determine success probabilities and investment levels for the project. In this regard, development of the project can include one or more different technologies, with different technologies in different stages of development. For example, a project can include a technology associated with materials utilized to manufacture the good that is in one stage of development, and a technology associated a particular manufacturing process that is utilized during the production of the good that is in another stage of development.
Whereas information regarding technical risk can be useful to manufacturers, such information is often qualitative. As such, it is often difficult to ascertain the impact of risk on the success of the project. For example, one such group of qualitative measures of technical risk, or technical maturity, are the Technology Readiness Levels (TRL's) developed by the National Aeronautics and Space Administration (NASA). As shown in the Table, below, the NASA TRL's represent a qualitative measure of the state of development of the project. As shown, the NASA TRL's consist of nine levels representing various stages of development. More particularly, TRL 1 corresponds to the lowest level of technology maturation. From TRL 1, then, the levels of technology increase through TRL 9, which corresponds to actual successful use of a fully developed project in an applicable environment for the project. At TRL 9, then, development of the project has typically matured past the point of troubleshooting problems discovered during testing, which typically occur at TRL 8.
NASA Technology Readiness Level (TRL)TRL 1Basic Principles Observed and ReportedTRL 2Technology Concept and/or ApplicationFormulatedTRL 3Analytical and Experimental Critical Functionand/or Characteristic Proof-of-ConceptTRL 4Component and/or Breadboard Validation inLaboratory EnvironmentTRL 5Component and/or Breadboard Validation inRelevant EnvironmentTRL 6System/Subsystem Model or PrototypeDemonstration in a Relevant EnvironmentTRL 7System Prototype Demonstration in a SpaceEnvironmentTRL 8Actual System Completed and “FlightQualified” Through Test and DemonstrationTRL 9Actual System “Flight Proven” ThroughSuccessful Mission Operations
As will be appreciated, the state of development of the technologies associated with a project can have a direct impact on the uncertainty, and as such the risk, associated with the cost and/or revenues of manufacturing and selling the good. In this regard, the ability to correctly estimate the technical risk impact on a project enables manufacturers to make better decisions as to investment and proportion of the investment to the level of project risk. Conventionally, manufacturers have not had the ability to reliably quantify the technical risk of a project proposal that has limited information, as extensive uncertainties, is concerned with new markets or technologies, or does not yet have a well-defined scope or specifications.